This is a technical amendment to delete a reference to section 15(3) which has been deleted from the Valuation Act 2001 by the Local Government Reform Act 2014.
Valuation (Amendment) (No. 2) Bill 2012: Committee Stage (Resumed)
NEW SECTIONS
Government amendment No. 62:
In page 14, between lines 42 and 43, to insert the following:
"Repeal of section 40 of Principal Act
20. Section 40 of the Principal Act is repealed.”.
Amendment agreed to.
Government amendment No. 63:
In page 14, between lines 42 and 43, to insert the following:
"Amendment of section 43 of Principal Act
21. Section 43(4) of the Principal Act is amended by deleting “or section 15(3)”.”.
If the Chair will permit him latitude, perhaps the Minister of State might update us on whether further discussions have taken place on provisions we have debated previously because we will not have an opportunity to revisit them on Report Stage. Is he proposing further changes along the lines of the genuine and sincere arguments made on this side of the House?
In a spirit of co-operation I am delighted to have the opportunity to respond to the Senator. As I outlined to the House in our debates on Committee Stage, my officials have been engaging in a constructive manner with the Irish Hotels Federation on its concerns. Although I believe these concerns have been addressed adequately in the legislation, I asked the federation to make a submission which it has made and which is being legally examined at my end. My commitment to the House is that if I am in a position to do anything on Report Stage to address the federation's concerns, I will do so, while reiterating that I am confident that the legislation will not have the effect suggested. In a spirit of goodwill and in providing comfort and reassurance for those who have given of their time to engage constructively, if it is possible to do anything on Report Stage - I am not yet in a position to indicate whether it will be possible to do so - I am approaching the matter with a view to doing so.
Amendment agreed to.
Acceptance of amendment No. 64 involves the deletion of section 19 of the Bill.
Government amendment No. 64:
In page 14, between lines 42 and 43, to insert the following:
“Amendment of section 45 of Principal Act
19. Section 45 of the Principal Act is amended by substituting for subsection (1) the following:
“(1) An officer of the Commissioner, or a person acting on that person’s behalf, may serve a notice on -
(a) the occupier of any property (whether relevant property or not),
(b) an interest holder, or
(c) such other person who, in the opinion of that officer or person so acting as aforesaid, has information in relation to such property,
requiring him or her to supply, within a period specified in the notice (being a period of not less than 28 days beginning on the date of the service of the notice), and in a manner specified in the notice, to the person who served it such information as is specified in the notice, being information that is necessary, in the opinion of that person, for the purpose of the performance by the foregoing officer, or another officer, of the Commissioner of his or her functions under this Act.”.”.
This amendment provides the commissioner, his or her officers or persons acting on his or her behalf with powers to serve a notice on other parties who may be in a position to supply information on a property that enables him or her to carry out his or her functions under the 2001 Act. Heretofore, this compellability was confined to owners or occupiers, whereas a significant number of other parties, including property managers, estate agents, receivers and administrators, may be in a position to provide information to assist the Valuation Office in fulfilling its mandate. Earlier amendments made changes in the area of compellability. This amendment facilitates its outsourcing to an officer of the commission.
Amendment agreed to.
Section 19 deleted.
SECTION 20
Government amendment No. 65:
In page 15, lines 26 and 27, to delete “, come into occupation or entered into a new tenancy” and substitute “or come into occupation or a new tenancy agreement has been entered in respect of it”.
This amendment is technical in nature and its purpose is simply to improve the wording of the Bill. It tidies up the original wording, but there is no difference in intent from the Bill as published.
Amendment agreed to.
Section 20, as amended, agreed to.
SECTION 21
I move amendment No. 66:
In page 15, line 31, after “person” to insert “appointed by the court”.
This amendment is being put forward because section 21 refers to other persons being allowed to enter premises to conduct valuations or allow valuations to take place, but it does not specify who these other persons shall be. The amendment provides that persons with legal authority, other than council officials, would have this power.
I thank the Senator for the amendment. The amendments to section 47 contained in the Bill were technical in nature and provided that those acting on behalf of the commissioner on a contracted basis also had the power to enter a property should it be required. In practice, this power is rarely used by the Valuation Office which cannot recall an instance in recent years where it has been so required. It is also unlikely to be required in the future, but, obviously, it is necessary to place members of the commissioner's staff and contractors acting on his or her behalf and under his or her direction and control in the same legal position should an occupier choose to obstruct the valuation process.
Any person operating on behalf of the commissioner will be acting on his or her instruction. The section already provides that three days' notice must be given to the occupier where it is intended to use this power. I stress, however, that this is a rarely used power, albeit one that needs to be retained none the less. To add the condition that a person must be appointed by the court would create a layer of unnecessary bureaucracy, dilute the provision and potentially frustrate its operation. For these reasons, I do not propose to accept the amendment.
Amendment, by leave, withdrawn
Section 21 agreed to.
NEW SECTION
Government amendment No. 67:
In page 15, between lines 36 and 37, to insert the following:
“Amendment of section 48 of Principal Act
22. Section 48(3) of the Principal Act is amended by deleting “and charges (if any) payable by or under any enactment”.”.
Acceptance of this amendment involves the deletion of section 22.
This amendment reverses the amendment to section 48(1) and the insertion of section 48(1)(a) that were included in the Bill, as initiated. Amendment No. 10, which has been agreed, amends section 13 of the Act to accommodate what was originally intended in the Bill. Moving the amendment to section 13 takes account of concerns raised about the commissioner dictating the method through which a value would be determined.
The amendment also proposes to delete the references to "charges" in section 48(3) of the 2001 Act, as the original inclusion of this reference could result in unintended consequences not contemplated at the time of the passage of the 2001 Act. As such, the term is open to the widest interpretation when taken out of context. The continued inclusion of such an open-ended term has the potential to undermine the rationale for section 48, which is to state and underpin the method of determining the value of a property generally. The term "charges" was included in the 2001 Act in an effort to modernise the wording used when bringing over the predecessor legislation, which had been enacted in the mid-19th century. However, it is now considered to be an inessential adjunct to the more clearly defined term "taxes" in a section which, over time, has generally worked well to the benefit of the valuation code.
The notional rent to be used in calculating the net annual value takes account of any encumbrances on the property. It would seriously undermine the concept of equity and uniformity if otherwise identical properties were distinguished from one another because of particular charges payable on enactment on one property but not on the other. The term may be deleted because its meaning could give rise to diluting and effectively reducing the valuation base.
Amendment agreed to.
Section 22 deleted.
NEW SECTION
Government amendment No. 68:
In page 16, between lines 3 and 4, to insert the following:
“Amendment of section 50 of Principal Act
23. Section 50 of the Principal Act is amended by inserting "(1)" before “If”, by substituting in subsection (1) “shall, subject to subsection (2), be an amount” for “shall be an amount” and by inserting the following after subsection (1):
“(2) An adjustment shall be made so that the amount arrived at by such means to be the property’s net annual value is (insofar as is reasonably practicable and in accordance with section 19(5) or 49, as appropriate) determined by reference to the values of other properties comparable to that property as appearing on the valuation list”.”.In page 16, between lines 3 and 4, to insert the following:
This is a technical amendment. Section 50 of the 2001 Act involves the use of a method of valuation known as the contractor's method, which relies on the notional cost of constructing or providing a property. When employing this method the net annual value equates to 5% of the aggregate costs, depreciated where appropriate, of the property in addition to the site value. This amendment allows for a further adjustment of a valuation which would bring the statutory valuation methodology in line with best practice valuation. The amendment is intended to ensure that values on the valuation list are correct and relative to one another.
While the Minister of State has gone some way towards meeting my concerns, he has not gone far enough. I would have liked an amendment that entitled an occupier or owner to seek a review of the rateable value of his or her property by the commissioner of valuation if, at any time, the value of the property changes. While the amendment moves in that direction, it does not go far enough. In the interests of fairness, an owner or ratepayer should be allowed to seek a review if the value of his or property changes. The value of a business can change overnight, for example, in the case of a petrol station located on a main road that is about to be bypassed. In such circumstances, the value of the company will change immediately. This occurs frequently when new stretches of motorway are built, an example being Urlingford, County Kilkenny. In such cases, flexibility and realism must prevail. Many shops in towns and villages nationwide lie empty for a variety of reasons. We need to introduce a measure that encourages ratepayers to seek a review. The amendment does not go far enough in this regard. I ask the Minister of State to consider whether it is possible to strengthen the amendment on Report Stage to give effect to the objective I have outlined.
I support the position outlined by Senator Feargal Quinn. I received a similar representation as that received by the Senator and it made a compelling case. I have forwarded the relevant documentation to the Minister of State seeking guidance and a formal response. The issue should be reviewed before Report Stage.
I also support the position adopted by Senator Feargal Quinn. As he noted, in many cases circumstances beyond the control of the owner of a property will impact on his or her ability to pay. Much of the debate on the local property tax related to ability to pay. Many properties in rural areas are vacant and many county councils have, for the first time, the power to impose half-rates on commercial buildings. While they are not required to exercise this power, it is available to them. Our concern is that the central grant to local authorities provided by the Department of the Environment, Community and Local Government will be cut, forcing them to act with disastrous effects.
Senator Feargal Quinn made a valid point on the issue of seeking a reduction in the rateable value of a property. There is no point in introducing half-measures. As someone who owned a business for many years, the Senator will be aware of the importance of keeping businesses viable and open. The Government has the power to achieve this by allowing business owners to reduce their rates bills. This would keep them viable and sustain employment.
I support the amendment and the views expressed by Senators Feargal Quinn, Jillian van Turnhout and Mark Daly. Urlingford was mentioned and we have a Kilkenny man in the Chair. I noticed a similar problem in Johnstown when I passed through it last. A major tsunami can strike a town as businesses move out and one must react to such developments quickly. What the Minister has provided for is a determination based on the rateable value of other comparable properties. Is it not possible to provide for a property that has lost a substantial amount of business without comparing it to any other business?
Senator Feargal Quinn made a valid point. From my memory of transport economics, I understand a petrol station can lose 95% of its business when a village is bypassed, whereas some of the other businesses in the same village will survive because people realise they will be able to find parking and this attracts new business. Filling stations, on the other hand, definitely lose when a location is bypassed. Is it possible to provide for a person who is on the receiving end and to do so not by means of a comparison with comparable properties, as the amendment provides, but by providing that he or she may simply show the accounts of the business? Where these show a significant decline in business and the property owner can demonstrate an ability to pay, the rateable value should be reduced. I thank the Minister of State for taking this into account in his amendment. The Senator raises an important issue for people in Urlingford, Johnstown and other places.
In keeping with the tone, it is not only bypasses that cause these types of problems. I was contacted recently by someone who took over a failed business that had closed. While the rent for the property had more than halved, the rate bill remained the same. The Bill refers to the best achievable rent and so forth. If a business was not viable previously, it will certainly not become viable if the rates remain the same. One would expect rates to decline in tandem with rents.
I thank Senator Feargal Quinn and other speakers for their contributions on this matter. The very purpose of the Bill is to speed up the process of valuation and revaluation in order that retailers, suppliers, owners, occupiers and others who find themselves in a premises with an unfair valuation know that the premises will be revalued quicker than is currently the case. This general principle runs through the legislation.
I am informed that section 27 of the Valuation Act 2001 provides for ratepayers to seek a review. I am interested in hearing Senators' views on this matter which we may be able to discuss on Report Stage. As Senator Feargal Quinn graciously acknowledged, my amendment goes further in the sense that it provides for greater flexibility and discretion to persons who are carrying out a valuation. It allows them to show common sense, whereas under the current legislation they must adhere rigidly to various rules and formulae without being able to apply judgment. While such flexibility is shown to some degree at present, we have not reflected in legislation the need to allow valuers to apply judgment and show common sense.
That is what I am trying to achieve with this amendment.
The Senator's example of a petrol station that is bypassed is one I used the last day we discussed the Bill. It is a classic example. Amendment No. 45 which I introduced on the last occasion is a new provision which equips the commissioner with additional authority to address anomalies on the valuation list, pending revaluation of the rating authority area. Rather than a petrol station that was busy and all of a sudden is bypassed having to wait for the next round of revaluations, under the Bill, the commissioner will have the authority to address serious anomalies such as this. The petrol station that is bypassed might be the most pertinent example. I am willing to listen to Senators' viewpoints and would welcome their thoughts on this matter on Report Stage. These are the four measures we have taken to try to improve the position.
I thank the Minister of State for that explanation. I would be happy to have the matter re-examined before Report Stage because it should be possible to solve the problem. The Minister of State has gone some way towards doing so, but I would like to see him going a little further.
Amendment agreed to.
SECTION 23
Government amendment No. 69:
In page 16, line 13, to delete “current”.
Amendment agreed to.
Section 23, as amended, agreed to.
NEW SECTION
Government amendment No. 70:
In page 16, after line 49, to insert the following:
“Amendment of section 55 of Principal Act
24. Section 55(1) of the Principal Act is amended by substituting “at his or her office or otherwise” for “at his or her office”.”.
In line with e-government policy encouraging the use of online approaches in delivering public services, the amendment is being inserted as a convenience to the public. It provides for the central valuation list specifying the global valuation of a public utility undertaking to be made available for inspection elsewhere other than at the office of the commissioner, which was the only option available until now. In practical terms, this allows for online inspection, making it unnecessary for people to attend at the Valuation Office to consult the list, unless they choose to do so.
Amendment agreed to.
Section 24 agreed to.
NEW SECTION
Government amendment No. 71:
In page 16, after line 49, to insert the following:
“Amendment of section 56 of Principal Act
25. Section 56(1) of the Principal Act is amended by substituting for the definition of “appropriate year” the following:
" 'appropriate year’ means—
(a) subject to paragraph (b), the financial year immediately following the financial year in which the first valuation under section 19 is carried out in relation to relevant properties situate in the area of the rating authority concerned, or
(b) if the effective date for the first valuation under section 19 carried out in relation to the foregoing properties is different from the publication date, the financial year immediately following the effective date;”.”.
Amendment agreed to.
Section 25 agreed to.
NEW SECTIONS
Government amendment No. 72:
In page 16, after line 49, to insert the following:
“State land
26. The Principal Act is amended by inserting after Part 12 the following new Part:
“Part 12A
STATE LAND
State land
56A. All State land vested in the Minister for Finance, by virtue of section 5 of the State Property Act 1954 or otherwise, immediately before the commencement of section 26 of the Valuation (Amendment) Act 2014, and all rights, powers and privileges relating to or connected with such State land shall, without any conveyance or assignment, stand vested in the Minister for all the estate or interest therein that, immediately before such commencement, vested in the Minister for Finance, but subject to all trusts and equities affecting any such State land continuing to subsist and being capable of being performed.
Legal proceedings
56B. Where any legal proceedings are pending to which the Minister for Finance is a party and the proceedings have reference to land transferred by section 56A, the name of the Minister for Public Expenditure and Reform shall, to the extent that they have such reference, be substituted for the Minister for Finance in those proceedings and the proceedings shall not abate by reason of such substitution.
Power of Minister
56C. Anything commenced but not completed before the commencement of section 26 of the Valuation (Amendment) Act 2014 by or under the authority of the Minister for Finance may in so far as it relates to land transferred by section 56A be carried on and completed by the Minister.
Instruments to have effect
56D. Every instrument (including any lease or licence) granted or made in relation to land transferred by section 56A shall, if and in so far as it was operative immediately before the commencement of section 26 of the Valuation (Amendment) Act 2014, continue to have effect as if it had been granted or made by the Minister.
Validity of transfer
56E. Nothing in this Part shall affect the validity of any transfer of State land or rights, powers and privileges relating or connected thereto effected by the Ministers and Secretaries (Amendment) Act 2011, the Finance (Transfer of Departmental Administration and Ministerial Functions) Order 2011 (S.I. No. 418 of 2011) or the Finance (Transfer of Departmental Administration and Ministerial Functions) (No. 2) Order 2011 (S.I. No. 480 of 2011).”.”.
It was the Government's intention that, as part of the establishment of the new Department of Public Expenditure and Reform, all land and buildings previously held by the Minister for Finance would transfer to the Minister for Public Expenditure and Reform. To this end, the functions under the State Property Act 1954 were transferred by Statutory Instrument No. 418 of 2011 and property related to these functions was transferred by Statutory Instrument No. 480 of 2011. However, an issue in relation to the transfer of such State property arose following indications from the Chief State Solicitor's office that in the case of certain property transactions there might be some ambiguity as to which Minister held particular State property, in other words, the Minister for Finance or the Minister for Public Expenditure and Reform. This issue refers to property vested in the Minister for Finance under section 5 of aforementioned State Property Act 1954 and also in relation to property simply deeded to the Minister, for whatever reason, but which is not readily identifiable as connected with the function held. To address these concerns and for the avoidance of doubt and following consultations with the Office of the Attorney General, the Office of Public Works and the Chief State Solicitor, it would be prudent to provide in primary legislation that all land and buildings previously held by the Minister for Finance are transferred to the Minister for Public Expenditure and Reform. Accordingly, the amendment provides for such transfer.
Senators will be aware that the Valuation Office is to be merged with the Property Registration Authority and Ordnance Survey Ireland. Depending on the timing of the transfer of functions from the Minister for Public Expenditure and Reform to the Minister for Justice and Equality, I may need to make minor technical amendments to sections in the new Part 12A to change references to "the Minister" to the "Minister for Public Expenditure and Reform", as responsibilities under this Part will not be transferring. I will advise the House on the matter on Report Stage.
Amendment agreed to.
Government amendment No. 73:
In page 17, between lines 36 and 37, to insert the following:
“Amendment of section 63 of Principal Act
26. Section 63 of the Principal Act is amended by inserting after subsection (3) the following:
“(4) Subsections (1) and (2) shall, with the necessary modifications, apply to an existing valuation list as they apply to a valuation list.”.”.
Section 63 of the 2001 Act confers an assumption of correctness on a valuation list in that the value of a property, as entered on a valuation list, is deemed to be correct. The proposed amendment is a technical one which clarifies that section 63 applies to an existing valuation list as well as to a valuation list. It arises from a possible oversight in the 2001 Act and is merely to clarify the intention that is already understood.
Amendment agreed to.
Section 26 agreed to.
SECTION 27
Government amendment No. 74:
In page 18, line 42, to delete “report.”.” and substitute the following:
“report.
Occupier may appoint agent
70. An occupier may appoint an agent for the purpose of the service of certificates, notices or other documents under section 66.
Data sharing
71. (1) Notwithstanding any enactment or rule of law—
(a) a relevant person shall, upon a request from the Commissioner, provide the Commissioner with such information in the possession or control of the relevant person as the Commissioner may reasonably require for the purpose of enabling the Commissioner to perform his or her functions under this Act, and
(b) the Commissioner shall provide a rating authority with such information in the possession or control of the Commissioner, pursuant to this Act, as that rating authority may reasonably require for the purpose of enabling it to perform its functions by or under any enactment.
(2) In this section—
‘relevant person’ means any of the following:
(a) a rating authority;
(b) the Commissioners of Public Works in Ireland;
(c) the Registrar of Companies;
(d) the Property Registration Authority;
(e) the Property Services Regulatory Authority;
(f) the Revenue Commissioners;
(g) any other person for the time being prescribed.”.”.
This amendment facilitates the appointment of an agent by the occupier of a property for the purpose of receiving a certificate, notice or other document under the Act. The amendment recognises that a significant number of property occupiers or owners retain agents to represent their interests when interfacing with the Valuation Office on valuation business.
The amendment also proposes the insertion of a new section to enable better data sharing. The purpose of the amendment is to formalise the sharing of data between the Valuation Office and other public sector organisations. The Valuation Office is an organisation with an extensive reliance on information in order to carry out its statutory functions. Some of its information has already been captured by other public sector organisations as part of their remit. As part of its valuation service function, it also solicits information directly from ratepayers, but it is often not in a position to validate the accuracy or completeness of such data without recourse to other data sets. Without appropriate data-sharing arrangements, the office is sometimes required to duplicate the information collection process by requesting the information from the ratepayer again, with the attendant cost and efficiency implications for all parties.
The most obvious and important example is the information held by each local authority. It is evident that the Valuation Office which is ultimately performing its functions for the purpose of local authorities levying rates should have efficient data-sharing arrangements in place with local authorities in order to avoid duplication of effort, minimise inconsistency in data quality and to reduce the administrative burden which the State is placing on the ratepayer.
The Department of Public Expenditure and Reform and the Valuation Office note and accept the principles of data sharing in the public sector which the Office of the Data Protection Commissioner has put in place. There are compelling benefits to be derived from putting appropriate data-sharing arrangements in place to facilitate the Valuation Office in producing valuation lists that are fair, equitable and transparent. Such arrangements will be sufficiently precise and proportionate so as to have minimal impact on individual ratepayer's data protection and privacy rights. In general, the data in question are not perceived as data of a personal nature within the meaning of the Data Protection Act 1988 and the Data Protection (Amendment) Act 2003. The extent of the data and their use will, of course, be limited to what the Valuation Office will require in the performance of its statutory mandate. Each data-sharing arrangement will be governed by a protocol which will be subject to the oversight of the Office of the Data Protection Commissioner.
Amendment No. 74 concerns the description of "relevant person". Will the Minister of State outline why the Revenue Commissioners will be included in that regard?
This is already the practice for the Revenue Commissioners which have relevant market data. One must remember that the entire purpose of the valuation is to determine what would be the notional rent derived from a property on which the Revenue Commissioners could and, from time to time, would have information. By inserting this amendment concerning data sharing, we are putting more safeguards in place in sharing data. It is important to reiterate that, when dealing with personal data, every single measure the Valuation Office seeks will have to be dealt with through an individual protocol with the Data Protection Commissioner setting out very clear parameters. We can discuss the matter further on Report Stage.
On a point of clarification, I presume the Revenue Commissioners would not have access to information on the profitability or tax clearance certificates of any business.
Will the Minister of State confirm that the Revenue Commissioners cannot just engage in a general fishing expedition when they are seeking specific information on an individual? In other words, I presume they cannot just trawl through a database for tax compliance purposes.
I am pleased to confirm that is the position for the Senator. I reiterate that this is being introduced for very specific purposes.
On Senator Tom Sheahan's concerns, I am also happy to reiterate that the liaison with the Revenue Commissioners, should the need arise, would be on rent or market transactions on which the Revenue Commissioners would obviously hold data.
As with earlier amendments concerning the courts, it is important to note that the Valuation Office tries to and generally does operate on a co-operative basis with ratepayers. We try at all stages to obtain information and work in a spirit of co-operation.
Amendment agreed to.
Section 27, as amended, agreed to.
NEW SECTION
Acceptance of amendment No. 75 involves the deletion of section 28.
Government amendment No. 75:
In page 18, between lines 42 and 43, to insert the following:
“Amendment of Schedule 2 to Principal Act
28. Schedule 2 to the Principal Act is amended—
(a) by substituting for clauses (b) to (e) of paragraph 3(4) the following:
“(b) a division of the Tribunal shall consist, as the chairperson of the Tribunal determines, of one member or of 3 members, chosen, in either case, by him or her;
(c) where a division of the Tribunal consists of 3 members—
(i) at least one of those members shall be the chairperson or a deputy chairperson of the Tribunal,
(ii) the chairperson of such a division shall be the person who is the chairperson of the Tribunal or, if the chairperson of the Tribunal is not a member of the division, the member thereof who is a deputy chairperson of the Tribunal;
(d) the chairperson of the Tribunal shall assign to a division of the Tribunal the appeals to be determined by it;
(e) for the purposes of an appeal assigned to it, a division of the Tribunal shall have all the powers of the Tribunal and—
(i) where a division of the Tribunal consists of one member, that division shall have all powers of the chairperson, and
(ii) where a division of the Tribunal consists of 3 members, the chairperson of a division of the Tribunal shall have all the powers of the chairperson of the Tribunal, and references in this Act to the Tribunal and the chairperson of the Tribunal shall be construed as references to a division and, where a division of a Tribunal consists of 3 members, the chairperson of a division, respectively.”,
(b) in paragraph 4, by substituting for subparagraph (2) the following:
“(2) The Tribunal may, where it considers it appropriate, determine an appeal on the basis of written documentation submitted to it without holding a hearing under paragraph 5 of this Schedule.”,
(c) by substituting for paragraph 5 the following:
“5. (1) The Tribunal may hold hearings and at the hearings may take oral evidence and may receive submissions by and on behalf of all parties to the appeal concerned and any another person appearing to the Tribunal to have an interest in or be likely to be affected by the determination of the appeal.
(2) Hearings of the Tribunal shall be in private.”,
(d) by substituting for paragraph 7 the following:
“7. A determination of the Tribunal, at or in relation to, an appeal (where it is the whole membership of the Tribunal or a division of the Tribunal that consists of 3 members that is dealing with the appeal) shall be that of a majority of its members.”,
(e) in paragraph 11(1)(b), by inserting, after “representative”, the following:
“including, where the Tribunal determines an appeal under paragraph 4(2) of this Schedule, the arrangements with respect to the submission of documents in writing”, and
(f) in paragraph 13—
(i) in subparagraph (2)(b), by substituting “or a person connected with such owner or occupier, or” for “or a person connected with such owner or occupier.”, and
(ii) by inserting after subparagraph (b) the following:
“(c) he or she derives or is entitled to derive an interest in, income, dividend, revenue, profit, share or any other pecuniary benefit from the use, rental, occupation, letting or disposal of part or all of the property.”.”.
The Valuation Tribunal is an independent body set up under the Valuation Act 1988 and continued in the Valuation Act 2001 to hear appeals against decisions of the Commissioner of Valuation.
The governing positions before the tribunal are contained in Schedule 2 to the 2001 Act. The amendments to this Schedule are primarily aimed at streamlining and improving the operation of the tribunal, increasing throughput of cases and reducing costs by giving the tribunal more flexibility in how it exercises its function. I am proposing change in a number of areas.
This amendment provides that a division of the tribunal can consist of one member or three members. At present, a division must have three members. For suitable cases this will allow more throughput at less cost and a more efficient hearing of appeals. The amendment also provides for the determination of an appeal on the basis of written documentation without the need to hold a formal hearing to which all parties would have to be summoned. Again, this will give the tribunal more flexibility to operate in a quicker and more efficient manner. The amendment provides that evidence to the tribunal may be delivered orally by all parties to an appeal. At present, this is limited to the appellant and the respondent.
Paragraph 13 of Schedule 2 provides that where a member of the tribunal has a beneficial interest that member shall disclose it, shall take no part in the consideration of the appeal and shall not vote or act in the determination of the appeal. This amendment extends what is regarded as a beneficial interest to situations in which the member is entitled to derive an interest in income, dividend, revenue, profit share or any other benefit from the use, rental, letting or disposal of part or all of the property. Current beneficial interest centres on being the owner or the occupier or being connected to the owner or the occupier. Extending what is regarded as a beneficial interest removes any doubt about where a potential conflict of interest could arise. At present, to have a beneficial interest, the member or spouse has to be the owner or occupier or connected to the owner or occupier of the property, as I have outlined.
I wish to flag an amendment to Schedule 2 that I will propose on Report Stage. It is a technical amendment that will remove any doubt about the tribunal's right to publish its decisions. On Report Stage there will also be amendments to include transitional provisions. The drafting of these amendments is deliberately left as late as possible in order that the scenarios that will obtain when the new legislation is enacted can be predicted as accurately as possible. The transitional provisions have to cater for whatever is in progress when the new legislation takes effect. I look forward to debating them on Report Stage.
Section 28 of the Bill is deleted as it is no longer required and the amendment to give effect to this was effectively made in the Local Government Reform Act 2014.
Amendment agreed to.
Section 28 deleted.
NEW SECTION
Government amendment No. 76:
In page 18, between lines 44 and 45, to insert the following:
"Amendment of Schedule 4 to Principal Act
29. Schedule 4 to the Principal Act is amended-
(a) by inserting the following after paragraph 4:
"4A. (1) Any building or part of a building used exclusively for community sport and otherwise than for profit, but not including any building or part of a building-
(a) used on a regular or occasional basis for the sale or consumption of alcohol or in conjunction with the sale or consumption of alcohol, or
(b) used directly or indirectly in the generation of income (not being club membership fees).
(2) In this paragraph 'community sport' means sport, the principal participants in which are inhabitants of the locality in which the building concerned (or part of the building concerned) is situated.",
(b) in paragraph 12A (inserted by the Local Government Reform Act 2014) by inserting ", but in this paragraph "harbour" does not include a harbour in respect of which a company has been established pursuant to section 7 of the Harbours Act 1996" after "whatever situate", and
(c) in paragraph 14(b), by inserting ", other than a body in relation to which such defrayal occurs by reason of the Nursing Homes Support Scheme Act 2009" after "Exchequer".".
Acceptance of this amendment involves the deletion of section 29.
This amendment makes three changes to Schedule 4 to the Act. Schedule 4 lists categories of property that are not rateable. The first change is to introduce an exemption for buildings or parts of buildings that are used for community sport but that are not used for the sale or consumption of alcohol or in the generation of income apart from club membership fees. The intention is to ease the rate burden on local sports clubs that involve local voluntary effort and that serve a valuable function in their community. At present, if a club has a bar then all of its premises are valued for rates purposes. This is the case even if the bar is only a minor part of the overall facility and the proceeds are used to defray the costs of running the club. This amendment will mean that it is only the commercial part of the club's building that will be valued and not buildings or parts of buildings used for community sport.
In proposing this amendment I am also conscious that sports clubs can be in competition with commercial licensed premises and other commercial operators. We can all think of examples, particularly in small towns and villages, of such competition. For this reason, I am limiting the exemption: it will not apply to any building or part of a building that is used to generate income that is not club membership income. This means that areas where food is served or prepared, retail areas and so on will continue to be valued. I do not want to put commercial operators at a competitive disadvantage while doing all we can to help local sports clubs in their voluntary efforts.
The commissioner of valuation will provide guidelines in relation to the part of the sporting facility which may or may not be exempt under this provision and will develop a procedure for gathering the relevant information. I am also informed by the commissioner that the buildings or parts of buildings valued will be published and that this can be inspected through the website of the Valuation Office. This will increase transparency and discourage any abuse of this provision by a club which might try to minimise its valuation by stating that a smaller part of the building is used for commercial purposes than is actually the case.
The second change to Schedule 4 is a technical amendment that brings the qualification of "harbour" which used to be in section 15(5) of the Act into Schedule 14. Section 15(5) of the Valuation Act 2001 has already been deleted by the Local Government Reform Act 2014.
The third amendment relates to exempt properties occupied by a body established for the purpose of caring for elderly, handicapped or disabled persons - in other words, nursing homes. Paragraph (14) of Schedule 4 to the 2001 Act has the effect of exempting nursing homes not established for profit but whose expenses are defrayed wholly or mainly out of money provided by the Exchequer. The purpose of this provision is to obviate any possibility that nursing homes that are operating for profit but funded from the fair deal scheme would endeavour to be exempt from rates under this paragraph. The effect of this amendment is that nursing homes that obtain funding from the Exchequer but that also operate for profit will not be exempted from rates. This is the current situation in relation to nursing homes, but I am using the opportunity of this legislation to clarify the position.
I apologise for indicating too early, but I have been sitting here for two previous sessions of Committee Stage in order to raise these points.
I welcome the amendments. They are very creative and will support good community organisations and sporting organisations and also the invaluable work of nursing homes. It is excellent to see this.
I wish to raise an issue in regard to child care settings, as it is a similar type of setting to that being discussed, but we need to explore it. Before I begin I wish to declare an interest. I am the chairperson of Early Childhood Ireland. It is a pro bono position, a Government position. I say this in case anybody feels there is any conflict in any issue I raise.
I thank the Minister of State's officials, who provided a very comprehensive briefing on the Bill before it commenced on Committee Stage. I learned a great deal about valuations at the briefing. I spoke about this issue on Second Stage in October 2012. There are about 4,700 early child care and education settings in Ireland which employ about 22,000 staff. They offer full day and school care for about 67,000 children and their families. Those figures are increasing all the time. The services are available in every corner of the country from small playgroup settings to very large settings ranging from ten children to 300 children. The service can be a charity, a not-for-profit body or a commercial operation. We do have the full spectrum.
Let us take a brief moment to consider the importance of early childhood education. The Minister of State has talked about sporting and the nursing homes. Early childhood education has proved to be a return in investment for the State but, more importantly, we know the importance for children in their development. This is one of the reasons we need to look more creatively at the rate situation in respect of these settings. The ECCE scheme which the Government heralds is an excellent scheme under which we offer a preschool year. The take-up rate of 96% among those who are eligible is great. It shows that the State and parents recognise the importance of early childhood care and education, but sustainability is a key issue. Since its introduction, a recent survey conducted by Early Childhood Ireland shows that 46% of crèches and preschools around the country have indicated that their financial stability has decreased. Under the scheme no additional charges can be made to parents. I am not arguing for additional charges, but the problem is that the rates charged are different throughout the country. Under the scheme the State has agreed to provide a particular amount for early child care settings. It sets out the number of staff and the amount of space that must be available. We are regulating all these components, yet the rates valuations can be very different around the country. I am looking at Senator Feargal Quinn because he will appreciate the difficulty of sustaining a business under this model. Early child care education settings are profitable in certain parts of the country but not worth it in other parts, purely because rates are the variable factor that can make it unviable, as they go off the Richter scale in some places.
There are a few issues. Charities are exempted, but the difficulty is that not-for-profits are not. We need to look at the not-for-profit model where we have community-based organisations. It should be possible to have those exempted. Based on the Government amendments, it is certainly something that could be done. Perhaps we might look at educational establishments.
There is a standard in Aistear, a State-designed curriculum. If these early child care settings are implementing the State curriculum, surely they should get recognition for doing so. There is also Síolta which provides guidelines on spacing requirements.
We need to look at where we put early child care settings. We know that 80% of a child's development occurs by the age of 3. At just 22 months a child's development level can accurately predict his or her educational outcome at 26 years of age. That means that at 22 months we know the educational outcome for a child. That fact reinforces for me the importance of early childhood education. The State needs to do what it can to support early childhood education.
Perhaps the difficulty lies with designated educational establishments. The Minister of State will probably say to me that the difficulty is that some of these organisations are for-profit. I am not against people making a profit and I can understand the State does not want, in any way, to support reducing that opportunity for people. Let us look at what the Minister did with the sports organisations in terms of alcohol. Can the for-profit parts be sectioned off? Most of these child care settings, even the for-profit ones, provide a free preschool year. That means that they provide a free preschool year by the State with these requirements and restrictions. Are we saying the other elements of their business needs to support same?
We also know that many parents support a second preschool year and that the second preschool year is essential for children with special needs. Many parents will come forward and say to the child care setting: "I will pay for this because I know how important it is and see how important it is for my child." The difficulty with saying that only those in the scheme will be exempt is we are saying "we do not want to take a child with special needs for the second year, who will be paid for, because that will make us in violation of the rules". Instead, the State should do everything that it can and I would prefer if the State paid for that child. In this case, parents are willing to pay but the child care provider is saying that the interpretation of wholly or mainly has changed. It used to be they felt it was over 50% but they are now saying it is 100%. In my briefings with the officials they said: "Well, we probably overlooked it." There is nothing in writing in order that child care providers know, quite comfortably, that they can take two or three children. How many children are allowed? What percentage is it? What is meant by "the business is wholly or mainly" in terms of the free preschool year? How does a child care setting know it can offer the service when it is 100%?
There is a real issue with children being turned away from child care settings. In 2011, there was a change in the applications of rates across the country which stated the exemption applied only to child care services that are exclusively or 100% ECCE funded, and did not offer any other services, as additional services are and were not considered educational.
We have a State curriculum, plus Aistear and Síolta so the State could easily add the rule that the State curriculum must be implemented in the extra time. The provision puts an enormous pressure on the services and will have a detrimental impact on some children, especially children with special needs. It will also have a detrimental impact on children with learning difficulties, language difficulties, and speech and language difficulties. Parents would like to avail of the scheme in all these areas and in their local community.
I wish to raise another issue on rates. We are encouraging child care places to literally comply with the regulations without extra space even though we know children need space. In some places, I am told, gardens are included while in other rateable areas gardens are not being included. Children should be allowed to play outside. I know a fabulous child care setting in Donegal where the children spend the majority of their time outdoors. It is an outdoor crèche so the children spend 90% or more of their time outdoors all day, every day. We should encourage child care places to have outside spaces and other areas of play. Child care places need a kitchen and a corridor. Extra facilities are needed, but they all add up to a rateable value.
The Minister of State can say: "We look at each building and go up or down but that depends on the building. We do not look at the purpose or use of the building." If rates are increased in an area then a shop or commercial outlet can change its product. As a business or commercial model, even the private child care settings cannot increase the number children. They cannot say we will stack them three high and pack more in. A child care setting is not that type of business model even for private operators. We need to encourage such settings. We must ensure they are available throughout Ireland and in every location. There is a need for a more creative way forward. Perhaps we could glean ideas from what has been done with the sporting and nursing organisations.
I have met people who run early child care settings throughout Ireland. I have been told their businesses are about to collapse because of the rates issue. It is the only variable that they cannot control and they are finding it extremely difficult.
I shall end on the following point. At this stage in Ireland we all recognise and agree that early childhood education is important but ten years ago that was not the case. The State must ask itself what it can do to support the delivery of such education in every community. The scheme has been brilliant because it has moved us away from the traditional question of whether a mother is working or not working and now focuses on the importance of education for the child. The scheme is not about the status of the parent but the child's ability to be in a child care setting in his or her local community yet still be in an educational environment that is very different from primary school.
Early childhood is a key developmental time in a child's life. I appeal to the Minister of State - I have had several conversations with him about it - to come back on Report Stage and find a way to at least alleviate the problem for some. Obviously I would like to see how we could provide relief for all who provide early childhood education in Ireland.
I support Senator Jillian van Turnhout's comments. I presume she will table amendments on Report Stage and can inform her that we are willing to support them. I am also sure that the Government will listen carefully to what she says.
I want to talk about the subject of this amendment. Here today a fraud has been perpetrated on the sports clubs and sports community of Ireland. A number of weeks ago Fine Gael Deputies were all over the country in response to Deputy Barry Cowen's Bill in the Dáil announcing that clubs with bars would be exempt from rates. We were all happy that the Government had decided to accede to our wishes. There are less than a dozen clubs in County Meath that are in that position. I appeal to all Senators and the GAA and FAI to listen to me because this is a very serious issue. Previously, under the 2001 Act, land developed for sport was exempt from rates. Today the Minister is changing that provision and deleting the exemption. He now includes the bars and is delineating them; therefore, we welcome the measure. He is also now bringing into the rates net any club that leases premises for commercial purposes which is basically any club in the country. Practically every single GAA and soccer club that I know rents out their pitches. That is what the Minister is getting at and that is what he is going to make rateable.
Part of the section states "used directly or indirectly in the generation of income". I was not aware that such clubs were subject to rates. The fact has certainly not been brought to my attention by anyone. The only organisations that made representations to me were the clubs in Meath GAA which had bars, which amounts to about six or seven clubs. There are some rugby and soccer clubs in the same situation also.
This proposal is an attempt to remove the exemption for land developed for sport and to bring in clubs that rent out their pitches or all-weather pitches. These clubs were given grant money but use the income generated by rentals to pay off loans they got to put with the grant money. The proposal will be very seriously opposed by all sides in this House and by the sports community throughout the country.
I support my colleague's comments on this section and our request that the Minister looks at it. We oppose what seems to be the Government's intention in this regard.
For many years, like many colleagues, I have been involved in GAA clubs. They rent out facilities, halls, astro turf pitches, etc., in order to pay back debt and to run the club. No one is making money out of the venture. These are all voluntary organisations which require the income to make sure their bills are met and the doors are kept open. They provide facilities for the community and for young people. That is the job of the GAA, the rugby clubs and soccer clubs. Therefore, the Government should encourage their efforts.
I also support Senator Jillian van Turnhout's comments on child care facilities. In fact, I have serious concerns in this regard. The provision for early child care in this country is not what it should be. Child care facilities in small rural towns and villages throughout the State require assistance from the Government. Charging them rates will not assist them - instead, they should be exempt. The availability of affordable child care is essential for families where there is a necessity for two breadwinners. Child care will not be affordable where rates are imposed on community crèches, a cost which will inevitably be passed on to the families who avail of their services.
I support the points made by Senator Jillian van Turnhout and ask the Minister of State to review this issue. There are other aspects of Government policy, particularly the early years strategy, wherein the importance of early childhood education is acknowledged. It is important that all aspects of legislation, whether relating to commercial enterprise or otherwise, speak to the overall thrust of Government strategy, particularly on something as important and relevant as the education of our children.
I understood, correctly or incorrectly, from the what the Minister, Deputy Brendan Howlin, told us that by not moving my Valuation (Amendment) Bill 2013, its provisions would be incorporated into or provided for in this Bill. My concern is ensuring there is equality as between in-town and out-of-town retail enterprises. Many of our towns have been decimated by the development of huge-scale, edge-of-town shopping developments, largely of the supermarket variety. Moreover, in recent times, many local authorities have imposed charges for car parking in towns. The Retail, Grocery, Dairy and Allied Trades Association, RGDATA - which happens to be my nominating body - is very concerned, as are traders and retailers in towns throughout the country, that many of these out-of-town stores are providing large-scale surface car parking free of charge. That is a totally inequitable situation which places in-town retailers, many of whom have suffered greatly, at a major disadvantage.
Planners have a great deal to answer for in terms of what has happened up and down the country. In many cases, they have succeeded in wrecking towns. This is something of a side issue but one of which the Minister of State is well aware, because we have had several conversations about it. I look forward to hearing his observations in this regard.
I agree with the points made by Senator Jilian van Turnhout who made her case far more eloquently than I could have done. Any government should be judged on how it treats young people and older people in our society. It is generally agreed in this and the other House that the Minister of State, Deputy Simon Harris, is very approachable, accessible and helpful, but he is also the youngest Member of the Dáil. The question of nursing home provision is much further down the line for him as a personal consideration than it is for me or my colleague, Senator Paul Coghlan.
I am just out of the crèche.
He has reiterated today that nothing will be done for nursing homes by way of these provisions in terms of their being exempt from rates. I know of a lady with no remaining family who has been in a nursing home for nine years. She is fortunate to be accommodated under the fair deal scheme. The State has been moving away from the provision of beds for the elderly through community hospitals and county homes. It all seems to be moving into the private sector and nursing homes. For many people, however, private nursing home charges of anywhere between €700 and €1,000 per week are financially prohibitive.
Will the Minister of State check what the cost to the Exchequer would be if rates were removed from nursing homes providing end-of-life care? That is the first obstacle we would have to overcome. Such a development would be a practical and compassionate way of giving something back to older people and their families. To be clear, I am not digging out here for the care providers, which is to say the nursing home owners. I am saying that for elderly people and their families who are paying between €700 and €1,000 per week for this care because they cannot get a bed in a community hospital, we should weigh the situation up and introduce some degree of fairness into it. If these homes were exempt from rates, we would be looking at a substantial reduction in charges. Many of them provide an excellent level of care - it could be described in many instances as deluxe or five star - which includes occupational therapy, physiotherapy, chiropractor services and so on. I hope the Minister of State will bear in mind the position for many older people. I will be in that situation much sooner than he will.
I will come to visit Senator Tom Sheahan when the time comes. I thank all Senators for their comments. I will deal first with the issue of community sports facilities. There may have been a misreading of the amendment, which I would like to clarify. I am stating clearly and categorically that we are not deleting paragraph 4 of Schedule 4 to the principal Act, which refers to "land developed for sport". There was a suggestion we were attempting to dilute it.
We know what is in the legislation. We can see that for ourselves.
I did not interrupt the Senator. The latter used very emotive language, including the word "fraud". I have been very clear since I first took Committee Stage of the Bill - this is the third occasion on which I have done so - as was my colleague, the Minister, Deputy Brendan Howlin, when he dealt with Deputy Barry Cowen's Bill in the Dáil, that we have no interest whatsoever in seeking to rubbish that Deputy's Bill. We saw what he was trying to do, which is why we did not object its proceeding. At the time, the Minister outlined in the Dáil what he saw as the technical difficulties with that Bill. I have outlined the same issues in this House. Senators may disagree with me, but to call our position fraudulent is unnecessary.
What we are trying to do in this amendment is to enhance the provision in paragraph 4, which states that land developed for sport is exempt, by improving the current situation. As it stands, a sports club the premises of which include a bar or other location of commercial activity, must, under the 2001 Act, pay rates on the whole lot. This was debated at the time of the passage of that Act, which was before my arrival in the Oireachtas, and a solution could not be found. I can understand it given that it is a tricky and technical issue. I have tried to come forward with a common sense compromise that reduces the rates bill for sports clubs by decoupling the commercial element from the voluntary sports activity element while also taking into consideration the need to ensure other business are not disadvantaged. To take an example from rural life, where we have a village pub and a GAA club, which has a bar, across the street from one another, we cannot have a situation where only one of them is paying rates. There has to be a differentiation between commercial and non-commercial activity. I am happy to tease out this issue with Senators.
We accept that, but what about pitch rental?
We would all agree that the Aviva Stadium or Croke Park should not be exempt.
Is the Minister of State saying those stadia were exempt before but will not be after this Bill is passed?
The situation in this regard is not changing. Commercial activity within sports club will still be rateable. We will have to take a common sense approach as to what constitutes commercial activity.
The Government amendment refers to generation of income rather than commercial activity.
I am outlining the purpose of the amendment. I am also outlining that we cannot have legislation which is completely prescriptive as to every possibility. There is a great difference between renting out the Aviva Stadium and renting out the local GAA club in a town in County Meath.
However, both are now rateable. There is no distinction.
There is a distinction. As I said, guidelines will be published by the Valuation Office which will flesh this out.
Where is that stated?
I am giving the Senator a commitment that it will be done.
There is no statutory provision for it.
Guidelines will be published by the Valuation Office.
How can we know that will happen, unless provision is made for it in the legislation?
It is quite difficult to explain when the Senator keeps interrupting me. I am happy to be challenged-----
Please allow the Minister of State to continue.
I will also be happy to tease out the issues on Report Stage. This Bill is an honest attempt to improve the situation. The Senator is quite correct that it is not abolishing all rates for all sports clubs. Commercial activity will still be rateable, but Senator Byrne will have to agree that it will improve the current situation. It will lessen the rates bill. Under current law, if there is commercial activity the entire place is rateable. We are trying to move beyond this. I welcome the Senator's views on the mtter.
Senator Jillian van Turnhout and other Senators raised issues relating to child care. I am eager to try to do something on this issue, but I am anxious to tease it out as well. It is not as straightforward as I thought when I first looked at it, but I am still hopeful we can do something on it. The current legal position is that there are three categories of child care providers under legislation. One is charitable organisations which provide child care facilities for charitable purposes and other than for profit. These are exempt. If a charity is running a crèche for disadvantaged families, it would not pay any rates. However, it must be exclusively charitable. Second, there are ECCI-only providers, early childhood cluster initiative. If the preschool year is the only service provided in the preschool in the premises, it is exempt.
The third category is everybody else. To be truthful, that category is too big. I accept the Senator's argument that something should be done for them. It is a fair point. The fact that a charitable crèche or child care provider is exempt and a not-for-profit provider is not is a very difficult position to defend. However, this is where one encounters the technical difficulty and it is the reason I cannot give a commitment to the House, although I am earnestly trying to do something about it. With respect to what we have done with the sports clubs, whether one agrees or disagrees with it, it is possible to separate the sports clubs physically. One can point to the bar and say that room is rateable, but the rest of the club is not. It is harder to decouple the children who are paying, the children who are not paying, the children funded by Pobal and, perhaps, the children paying full fees. The children will move around. It is a valuations Bill and it is trickier to work out the decoupling physically.
It is also important to point out that valuations tend to be fixed. Again, whatever modality one uses would have to recognise that the valuation will be fixed for a period of years. The number of children in certain schemes or being paid for by a certain method might change, but the valuation model does not offer the opportunity to revise that every year with a new intake of children in September. Those are the difficulties.
The Senator also referred to the lack of consistency. I met a number of child care providers recently and they raised this point. A crèche in one county might be exempt and a child care provider in another county might not. Even within counties there is definitely a lack of consistency and I am anxious to use this legislation to try to achieve consistency and fairness.
I will examine the point made by the Senator about the State curriculum, but if I am able to make a targeted intervention I am inclined to look at the group with charitable status and not-for-profit that is currently paying rates. I look forward to Report Stage to see where we can go in that regard.
Senator Paul Coghlan raised the issue of out-of-town car parking. Indeed, his Valuation (Amendment) Bill 2013 was discussed in this House on 12 December last. We have had a number of conversations about this. The Bill sought to provide for the valuation of car parking spaces for rate purposes in retail centres. It provided that the value of any car parking spaces should be determined on the basis of the annual charge calculated by reference to the higher of the local authority charge for parking or the cost levy on shoppers for the use of the space concerned. The Minister, Deputy Brendan Howlin, accepted the Bill because he understood what the Senator was trying to do.
My officials have explored the intent of what the Senator is trying to achieve, which I consider to be important, and the advice I have received is that the Valuation Act 2001 already provides for the valuation and rating of car parking spaces in retail centres. Where there is a charge for car parking, the car park is valued separately and entered on the valuation list. Some car parking facilities carry significant valuations. In shopping centres where there is no charge this often reflects the terms of the retailer's lease and the value of the car parking is deemed to be subsumed into the rateable value fixed on the retail units in that centre. Parking facilities will be reflected in the premium on the rent paid, and higher rents mean higher valuations and higher rates. To use the method of valuation proposed could be at variance with the norms of valuation enshrined in legislation and encoded in practice both here and internationally and could have significant implications for rating legislation.
I am aware of what Senator Paul Coghlan is trying to achieve and my officials tell me we are largely achieving it. I suggest the Senator meet my officials between now and Report Stage to tease out the concept and to assure himself that we are on the same page in this regard.
With regard to nursing homes, Senator Tom Sheahan is correct that the legislation does not propose a change and I accept that it causes him concern. The Valuation (Amendment) (No. 2) Bill cannot be the answer to all the ills and ailments facing society. It is a valuations Bill and there are other ways the State can, should and does provide intervention relating to nursing home support, care of older people and support for the elderly. Do we want a situation whereby the State differentiates between businesses, both of which are making profit, based on the service they are providing? That is a genuine, broad policy question that can be debated, but it is a slippery slope if the State can decide that the Senator's profitable business on the main street in Tralee is more important than my profitable business on the same main street in Tralee. That is the question that must be examined.
The Senator asked a question about the cost. I will try to gather some statistics in that regard and refer back to him.
The other point I should make, which is applicable to the arguments I have made relating to sports, child care and nursing homes, is that for every person who is taken out of the rates or valuation system or for every valuation reduction, the pie remains the same and somebody else must pay. If a profitable nursing home or a nursing home established for the purpose of making a profit is removed from valuation, somebody else in that locality will see an increase in their valuation. It is a balance and we are earnestly trying to get it right.
I did not understand clubs which rented out pitches were liable to rates. They are not paying rates, as far as I know. I have not received representations from them, but have received representations about the bars. What is proposed has nothing to do with commercial. In fact, the word "commercial" is not used. The Minister has kept the exemption for sports facilities but has introduced qualifications of that. One is for the bar, which we can accept. We fully agree with it and there is no need to justify that change. The Minister will include the part of the building that is used on regular occasions for the consumption of alcohol or used directly or indirectly in the generation of income. However, in many cases that would be the entire GAA pitch or club or the entire soccer pitch. If the Minister says the building does not include pitches, I will be happy to hear it, but I doubt it because these people would be using dressing rooms and so forth. What about the local societies that use GAA clubs for meetings? Will they cause a rates issue for GAA or soccer clubs that did not arise previously? That is what is intended in this provision.
The Minister says the Valuation Office will introduce guidelines. The Oireachtas should set out the guidelines and establish what is and is not rateable. In fairness to the Minister, I have not accused him of a fraud. I have accused Fine Gael Deputies of a fraud when they issued press releases-----
I am one of those, too.
The Minister might have done so in his constituency. They issued press releases welcoming this great provision for GAA clubs. When I met the clubs in County Meath, about seven of them were affected. Now, on reading this provision, it will be 70. The Minister will have to clarify this. The sports sector is watching this debate in an effort to find out what is happening, because the Minister's answers have not been clear. We do not wish to charge rates to voluntary sports bodies around the country. That is not what Deputy Barry Cowen was seeking in this Bill. He sought to tighten the provision and have the rates only apply to the bar area of a club. Perhaps the Minister might provide a little more clarity on this. We will oppose it.
Is the issue Senator Mark Daly wishes to raise the same?
Yes.
Senator Jillian van Turnhout has raised a separate issue and I want the Minister of State to deal with this specific issue.
I understand Senator Jillian van Turnhout will table an amendment on Report Stage.
This is worrying, which is why we are having this debate. This must be removed. There is a difference between generating income and generating income for commercial purposes. GAA clubs, as a necessity, rent out halls to other sporting organisations for indoor soccer, basketball and so forth. Rugby clubs do the same. They all do it. They also rent out their dressing rooms for the use of outdoor facilities in the winter, such as synthetic grass pitches for which planning permission is required to erect the spotlights.
This will cost sports organisations millions of euro.
The relevant section states it refers to facilities used directly or indirectly for the generation of income. When dressing rooms are rented for €70 an hour, they are being used to generate income. That is a fact, whether it is a GAA, soccer or rugby club. I would debate whether a synthetic grass pitch is a building. Planning permission is required to erect spotlights. Along with dressing rooms, halls for meetings and basketball courts are rented to local communities for training for winter games. That is specifically provided for in the Bill. I take the Minister of State's bona fides on board in terms of guidelines, but they need to be introduced here. I strongly suggest there has to be an amendment to this section.
The Government will charge sporting organisations money and thousands of organisations will be affected by this. Millions of euro will be sucked out of them. All they want to do is provide sports and activities for young people and the community, and they should be supported in that respect. They will not be able to pay for insurance for the teams on fields and buy footballs, rugby balls and soccer balls because they will have to pay commercial rates.
Before there is widespread panic, let us be very clear. The purpose of the amendment is to reduce the rate bills for sports clubs. One can argue that the system needs to be tightened and suggest how that should be done. I am happy to engage on those points between now and Report Stage and consider any amendments which would ensure what we are trying to do is achieved. I am more than open to this.
There is and always has been a principle in valuations of de minimus, and that will continue for guidelines. The Valuations Office is not in the business of checking whether an upstairs meeting room was rented out to an organisation. The purpose of the amendment is to improve the current lot. If there are amendments on Report Stage to tighten this up and Senators wish to meet my officials to discuss them, I am happy to facilitate this.
Senators can do as they wish, but they should not try to create panic. I want to be very clear, as Minister of State with responsibility for this Bill, that its purpose is to reduce the rate bills for sports clubs. I am giving an assurance to sports clubs in this country that between now and the passing of the Bill that is what will be achieved, and it is something which has not been achieved in previous valuations Bills. It was discussed in this Chamber and the other House in 2001 and no progress was made on it, because it is a tricky area.
Sports clubs are exempt.
Clubs with licences are being charged rates on their entire operation.
I accept that.
That is not fair and is what we are trying to address. We are not trying to introduce new charges on sports clubs. I have legal advice on the amendment I proposed. I outlined the guidelines and my openness to further engagement on this between now and Report Stage. The amendment is an honest effort to improve the lot of sports clubs. If we have to go further between now and Report Stage to address any concerns I am more than happy to do so.
I ask the Minister of State to be very clear about the purpose of paragraph (b) in the new section. It refers to buildings or parts of buildings used directly or indirectly in the generation of income. Why is that provision being introduced?
It refers to commercial activity, such as a golf shop or a pro shop. There is a massive range of sports clubs which are involved in a significant variety of activities. If a serious level of income is generated, that is a different matter. I have been very clear in all my public comments. The Fine Gael Deputies who have upset the Senator by issuing those statements-----
I was delighted. I welcomed the Bill, until I read this.
-----have also been very clear that this is not about commercial activity not being rated or the generation of serious income. I hope I have been emphatic that we are not referring to the diminutive income suggested by the Senator. The guidelines which will be issued and the practice to date reflects this. The Valuations Office has a very good track record on this issue.
I hope Senator Thomas Byrne is not trying to justify a tweet sent about this Bill costing sporting clubs millions of euro.
I am trying to minimise-----
It is a tweet which may have been sent.
The Minister of State referred to serious income. There is nothing about serious income in the amendment. He referred to commercial activity, but there is nothing about that in the amendment. It simply refers to buildings used directly or indirectly in the generation of income no longer being exempt. That surely sends a message that any club which rents a pitch or dressing room will be affected. The Minister of State said it means something different-----
The Senator is reading the amendment in isolation.
-----and referred to golf shops and pro shops. I do not want to exempt a golf shop.
Good.
Such shops should pay rates. I want to exempt a club which rents its pitches.
So do we.
That is not what the amendment states.
I am experiencing a certain sense of déjà vu. I am hearing the same conversation going around and around. As I understand it, the Minister of State has indicated that he wants to clarify the position. He has offered the Senator the opportunity to meet with his advisers. I propose a phrase which might clarify this. Instead of "otherwise than primarily for profit" and "used directly or indirectly for the generation of income", the amendment could state, "used directly or indirectly for commercial purposes." That might be considered by the Minister of State's adviser. He has offered Senator Thomas Byrne the same opportunity and perhaps he might take it in order that we can bring this to a conclusion.
I thank the Senator for her constructive suggestions. Income generation tends to come from commercial activity. The generation of income does not mean the nominal receipts of income. I do not want to get tied up in a word game. I have outlined very clearly the intention of the Bill and the amendment, which is to improve the lot we have inherited and make things better for sports clubs. We want to provide clarity and update and modernise the legislation. To add any more would be to go around the houses, and I know the Acting Chairman will be relieved that I will not do that.
I welcome the commitment of the Minister of State to examine the issue of early child care and I am happy to work with him on that. I understand if someone is exempt from rates the pie stays the same and has to be divided. The reality is that the pie does not stay the same for early child care settings. Where they are providing the State free preschool year the rate per child, space requirements and number of early childhood educators required are set by the State.
The variable is rates. A child care provider in Fingal told me it is charged rates as high as €20,000, but those in other parts of the country are charged €10,000 or are exempt. Consistency, whether one is for profit, is a major issue. I understand children can be in different rooms, but those availing of the free preschool year are all the same room because they are all the same age. The State has defined the space. A provider should be able to state that it has X number of children in the scheme, therefore, it should be exempt. We have to find a way to address this because the costs of providing the State scheme for some early child care providers are prohibitive. Many are on the brink of saying they cannot afford to provide the scheme.
Why are we allowing other children in not-for-profit and private child care providers subsidise a State scheme which the State is hailing as free for all children? In many areas, other parents are subsidising the scheme because they are paying for the extra space needed for this child care place. We have recognised the importance of early childhood care and education. I want to ensure that wherever people are located, they can access early childhood care and education. While this legislation cannot answer all of our ills, it should not contribute to or add to them. We must work to ensure we minimise these ills. I am happy to take up the Minister’s offer to work with him between now and Report Stage to see what we can do in this regard. This is a larger issue than people realise. When child care providers start closing, people will ask why they did not pay attention. Rates are a massive issue for these care centres and are one of the main variable factors for them.
Amendment put:
The Committee divided: Tá, 23; Níl, 17.
Tá
- Bacik, Ivana.
- Brennan, Terry.
- Burke, Colm.
- Coghlan, Eamonn.
- Coghlan, Paul.
- Conway, Martin.
- Cummins, Maurice.
- D'Arcy, Jim.
- D'Arcy, Michael.
- Hayden, Aideen.
- Higgins, Lorraine.
- Keane, Cáit.
- Kelly, John.
- Landy, Denis.
- Moloney, Marie.
- Moran, Mary.
- Mullins, Michael.
- Naughton, Hildegarde.
- Noone, Catherine.
- O'Donnell, Marie-Louise.
- Sheahan, Tom.
- van Turnhout, Jillian.
- Zappone, Katherine.
Níl
- Barrett, Sean D.
- Byrne, Thomas.
- Crown, John.
- Cullinane, David.
- Daly, Mark.
- Heffernan, James.
- Leyden, Terry.
- Mooney, Paschal.
- Mullen, Rónán.
- Ó Domhnaill, Brian.
- Ó Murchú, Labhrás.
- O'Brien, Darragh.
- O'Sullivan, Ned.
- Power, Averil.
- Quinn, Feargal.
- Reilly, Kathryn.
- Walsh, Jim.
Tellers: Tá, Senators Paul Coghlan and Aideen Hayden; Níl, Senators Paschal Mooney and Ned O'Sullivan.
Amendment declared carried.
Amendment No. 77 not moved.
Section 29 deleted.
NEW SECTION
Government amendment No. 78:
In page 19, between lines 9 and 10, to insert the following:
“Amendment of Schedule 5 to Principal Act
30. The Principal Act is amended by substituting for Schedule 5, to it, the following:
“Schedule 5
Plant Referred To In Section 51
1. A construction affixed to a relevant property (whether on or below the ground) and used for the containment of a substance or for the transmission of a substance or electric current, including any such construction designed or used primarily for storage or containment (whether or not the purpose of such containment is to allow a natural or chemical process to take place), but excluding any such construction used solely to induce a process of change in the substance contained or transmitted (in paragraph 2 referred to as the ‘substance concerned’).
2. For the purposes of paragraph 1 the following shall not be regarded as a construction used solely to induce a process of change in the substance concerned, namely any individual item of plant used or primarily used—
(a) for containment or transmission, or
(b) for one or more actions or a series of actions,
that may take place, before or after, the occurrence of action that induces, in a separate construction affixed to the property, a process of change in the substance concerned.
3. The fact that particular plant is not used on its own, but rather is used in conjunction with one or more other items of plant, does not disbar it from being regarded as an individual item of plant for the purposes of the preceding paragraphs.
4. All fixed furnaces, boilers, ovens and kilns.
5. All ponds and reservoirs.”.”.
This amendment relates to rateable plant as referred to in section 51 of the 2001 Act, particularly with regard to the individuality of certain components of plant in manufacturing and industrial processes. For the purpose of valuation, plant is specified in paragraph (1) of Schedule 5 of the Act. However, there is an exclusion from valuation of any constructions which are designed or used primarily to produce a process of change in a substance contained or transmitted. For instance, such a process could be a chemical change, distillation or fermentation in various forms, depending on the type of plant or process in question.
The long-established interpretation has been that the vessels or component parts of the plant where a process of change takes place are exempt from rates but that other items of plant, including structures and elements used for storage, are rateable. The High Court recently ruled by way of a case stated to it by the Valuation Tribunal that certain manufacturing plants in their entirety were exempt from rateability by virtue of the exclusion as currently contained in paragraph (1) of Schedule 5. In the light of the ruling by the High Court and with a view to protecting the rateability of plant, as was intended by the legislation as defined in paragraph (1) of Schedule 5, I propose this amendment so as to restore the position of the rateability of plant to that which existed before the High Court ruling and to bring greater clarity to this area of valuation for rating purposes.
The original Schedule 5 exclusion exempts the plant now used for storage or containment but which was designed to induce a process of change. This anomaly is also being addressed in the amendment. The amendment now proposed seeks to ensure each individual component of plant is clearly discerned as being rateable or non-rateable in the valuation assessment. It will make certain that all constructions used for containment or storage of substances are to be valued, regardless of whether the change process occurs in such construction either before or after the substance has been transmitted through and-or temporarily contained in the quite separate constructions that are excluded from valuation because their specific purpose is to induce a change.
The important issue is to distinguish clearly between constructions used for storage, which are to be valued, and constructions used solely to induce a process of change as part of the manufacturing process, which are exempt from valuation. The purpose of this amendment is to address potential implications for ratepayers and local authority funding which could arise if the court's interpretation of non-rateability in this case is extended to other industries involved in manufacturing plant on a nationwide basis. This amendment seeks to reiterate the status quo in regard to differentiating between storage and the change process.
While I am not going to delay on this amendment, the business community should be aware of this measure. This will bring about big changes after what was decided in the High Court. I object to what is happening in the Bill, and I have made this point time and again. I did not realise this fully because I did not read the admittedly helpful notes from the Government on this Bill as I wanted to do my own reading on the Bill before I read what the Government was stating. However, while I was making the allegation that these amendments were designed to overcome court cases, in fact, it is its specific intention to overcome a High Court case where taxpayers and ratepayers got a bit of a break. Now, we are coming in to say the court was wrong and that we must change this. There should be huge concern about this as it will increase rates bills pretty dramatically for some businesses. I do not believe it is a fair use of parliamentary procedure that we just come in and change court decisions. It is fundamentally wrong.
I also have a concern about this and would like the Minister of State to put my mind at rest. I understand the point he is making and what is being aimed at. The idea is to render some types of plant and equipment, which the High Court recently found to be exempt from rates, again eligible for rates. The words used are such that plant which is "used solely to induce a process of change" is exempt from rates. Will this change on the basis of this amendment? The High Court judgment of December 2010 found that plant used in the manufacture of concrete and asphalt qualified for exemption, a view that the Valuation Office was opposed to and has since appealed against to the Supreme Court. It is still with the Supreme Court and has not been considered. It seems the amendment seeks to change the legislation to rule out the vast majority of plant from exemption from rates.
I would like the Minister of State to put my mind at rest because this would be very serious. Despite everything we read in the media, the overwhelming majority of construction companies have a huge challenge on their hands, despite having the opportunity to create jobs. I know something about the construction business in recent years and know it has fallen on very difficult times. It is disappointing that the Government is attempting to disqualify companies which otherwise would have been able to enjoy this exemption. I would like the Minister of State to put my mind at rest.
I echo what Senator Feargal Quinn said. Sometimes the taxpayer can actually win in the courts. While we talk about entrepreneurship, the sometimes defensive reaction on behalf of the Exchequer is: "Let us go and rewrite the rules. That will teach them to bring cases. You can never overturn the State. You argue with city hall and city hall always wins." We have very long-winded, verbose documents about the nature of entrepreneurship but if a sector has had its tax burden reduced, that is a stimulus to that sector.
I would be worried, particularly as Senator Feargal Quinn has said this is now with the Supreme Court, which means we go from overturning a High Court decision to trying to anticipate a Supreme Court decision. I would have liked a discussion on the principles of what is involved. I would be reluctant to support the position that if the taxpayer gets a break, and presumably those cases cost a large amount of money, the first reaction of the State is to change the rules because the State looks embarrassed if the citizen wins the odd one, although this happens very rarely in the courts. These are my concerns.
This amendment seeks to clarify and outline what has always been understood to be the view of the Valuation Office and, one presumes, this House when passing legislation in 2001 regarding an exclusion from valuation of any construction designed or used primarily to induce a process of change as opposed to storage. If there is a storage container at Dublin Port, it is rateable, regardless of what is stored in it, regardless of whether it is construction material or anything else. Therefore, is it appropriate that if it is stuck onto another property or piece of machinery, it no longer be rateable?
We are not attempting to overturn High Court decisions, as it is the job of the courts to interpret the law of the land and the job of the Houses to make laws. Therefore, it is incorrect to say we are seeking to overturn a High Court decision, although I understand what is being suggested by Members.
It is rarely I disagree with Senator Sean D. Barrett, but I must disagree with him on the idea of giving the taxpayer a break. While this is not a crime, I will use the analogy that it is not a victimless one. It is a case of one taxpayer versus another. As the base remains the same, one taxpayer wins and the other does not. Some of the court decisions with which this legislation has dealt concerned geographical issues, of which I know Senator Thomas Byrne and others would be well aware, concerning motorways and the like. When such a company wins, another ratepayer in certain counties must pay. This is not about being on the side of one taxpayer over another. The job of the Government and the Oireachtas is to be on the side of the taxpayer in an overarching sense; it is not our job to be on the side of a specific taxpayer or set of taxpayers. What the amendment tries to do is to clarify and reinstate the position, as it was always intended by the House in the passage of various valuation Bills.
Amendment put and declared carried.
Sections 30 and 31 agreed to.
TITLE
Government amendment No. 79:
In page 3, to delete lines 5 to 9 and substitute the following:
“An Act to amend the Valuation Act 2001 and to facilitate the drawing up and compilation and maintenance of valuation lists so that the valuations fixed on rateable properties in a rating authority area are both (insofar as is reasonably practicable) correct and equitable and uniform relative to each other, to provide for the undertaking, by the occupiers themselves, of all or one or more of the steps in the valuation of certain premises, to provide for certain matters relating to state property and to provide for related matters.”.
It is proposed to change the Long Title of the Bill in order to reflect the importance of the correctness of valuations and their relativity to each other, as already provided for in section 49 and otherwise in the principal Act. The important and overriding principle is that the valuation of properties is determined correctly by reference to the values of other comparable properties in the same rating authority area. It is a fundamental principle of valuation practice that all values entered on a valuation list are not only a correct reflection of the value of individual properties but also that all values are consistently applied and correct relative to each other. This is an issue we have debated to a great extent and will continue to debate. It is the relativity of the value of property that determines the proportion of rates in a rating authority area which an occupier will be asked to pay. The amendment is being made to remove any room for ambiguity in the method of valuation used and reinforce correctness and uniformity as overriding principles which underpin the rateable valuation system.
An amendment to the Long Title is also proposed to reflect the provisions in the Bill which provide the opportunity, where appropriate, for occupiers of properties to undertake certain steps in the valuation process which will assist towards the assessment of a valuation. Such a provision is designed to speed up the valuation process in certain areas where it is likely to be beneficial and cost effective. This is referred to as the "occupier assisted valuation". It is only right and appropriate that the Long Title of the Bill accurately reflect the content of the Bill. What I have attempted to do is reflect the various amendments passed on Committee Stage.
Will the Minister of State, please, explain in more detail the omission of the term "self-assessment" from the Long Title? He has explained it in a roundabout way, but will he state explicitly that it is gone? It was one of the key parts of the Bill as announced by the Minister for Public Expenditure and Reform, Deputy Brendan Howlin. I am not going to go over the argument again, but the Long Title goes to heart of some of our objections to the Bill.
I note the points the Senator has made and the points on which we have differed during this constructive debate and take the opportunity to say I expect some of the issues we have teased out about child care and sports clubs, as well as the concerns of the Irish Hotels Federation, can be rectified on Report Stage and that the legislation will be improved as a result. That will be a good day's work for the Oireachtas and I am grateful for its input.
I do not intend to reiterate the arguments I have already made about amendments Nos. 21 to 25, inclusive, and 27 to 30, inclusive, about occupier assisted valuation, other than to restate the view that the use of the term "self-assessment" has led to confusion. Contributors to the debate on the issue expressed the view that ratepayers in areas in which properties had been revalued would be at a disadvantage in not being able to self-assess. It was never the intention that the system of self-assessment would allow ratepayers to determine their own valuation. Valuation for rate purposes is a very different exercise and self-assessment in that context is always going to be within tight guidelines. The role of the Valuation Office is to assess liability, not to collect any element of the rate payable.
By helping to avoid confusion in previous amendments to the Bill and referring to it in the future as "occupier assisted valuation", the term more accurately reflects what happens in practice. I reiterate that, in practice, the Valuation Office may request occupiers to assist in the valuation of their properties. In order to facilitate this, the office will provide them with indicative valuation levels based on market evidence available to the office. Ratepayers can propose a different value which will be examined by the office for correctness and an alternative valuation can be proposed by the commissioner, if necessary. The Bill, as amended, will give occupiers providing valuations of their own properties the right to make representations where the valuation they submit is not accepted. This is a right they did not have under the original Bill.
In the context of outsourcing, the modernisation of some provisions, the honest efforts made to improve matters for sports clubs and child care services, streamlining the appeals process and allowing occupier assisted valuation, the Bill will lead to a better valuation system. I note that Senator Thomas Byrne and I disagree on this issue, but I respect the difference between us.
Amendment put and declared carried.
Title agreed to.
Bill reported with amendments.
When is it proposed to take Report Stage?
Next Tuesday week.
Question put: "That Report Stage be taken on Tuesday, 4 November 2014."
The Seanad divided: Tá, 28; Níl, 13.
Tá
- Bacik, Ivana.
- Brennan, Terry.
- Burke, Colm.
- Coghlan, Eamonn.
- Coghlan, Paul.
- Conway, Martin.
- Cummins, Maurice.
- D'Arcy, Jim.
- D'Arcy, Michael.
- Gilroy, John.
- Hayden, Aideen.
- Heffernan, James.
- Higgins, Lorraine.
- Keane, Cáit.
- Kelly, John.
- Landy, Denis.
- Moloney, Marie.
- Moran, Mary.
- Mullen, Rónán.
- Mullins, Michael.
- Naughton, Hildegarde.
- Noone, Catherine.
- O'Donnell, Marie-Louise.
- O'Neill, Pat.
- Reilly, Kathryn.
- Sheahan, Tom.
- van Turnhout, Jillian.
- Zappone, Katherine.
Níl
- Barrett, Sean D.
- Byrne, Thomas.
- Crown, John.
- Daly, Mark.
- Leyden, Terry.
- MacSharry, Marc.
- Mooney, Paschal.
- Norris, David.
- Ó Murchú, Labhrás.
- O'Brien, Darragh.
- O'Sullivan, Ned.
- Power, Averil.
- Quinn, Feargal.
Tellers: Tá, Senators Paul Coghlan and Aideen Hayden; Níl, Senators Paschal Mooney and Ned O'Sullivan.
Question declared carried.
Report Stage ordered for Tuesday, 4 November 2014.
Sitting suspended at 2.15 p.m. and resumed at 2.30 p.m.